September 13, 2010 / 4:55 PM / 9 years ago

U.S. to tell Congress of up to $60 billion Saudi arms deal

WASHINGTON (Reuters) - The Obama administration will soon notify Congress of an arms package for Saudi Arabia worth up to $60 billion, U.S. officials said on Monday, a potentially record-breaking deal that may help counter Iran’s growing regional muscle.

A U.S. Army Black Hawk helicopter lands on a field in Kandahar province, southern Afghanistan, May 11, 2010. REUTERS/Yannis Behrakis

A senior U.S. defense official, speaking on condition of anonymity, said he expected the Saudis to initially commit to $30 billion in purchases, but that could double.

The package would include 84 new Boeing Co F-15 fighter jets and upgrades to another 70 of them. It also involved 72 Black Hawk helicopters built by Sikorsky Aircraft, a unit of United Technologies Corp.

“It’s massive,” said Andrew Exum, an analyst at the Center for a New American Security, calling the long-anticipated deal a “shot-in-the-arm” for the U.S. defense industry.

“What the United States is trying to do here is pretty clear. (It is) basically trying to work by, with, and through our partners in the region to balance against Iran,” he said.

The regional buildup comes amid deepening international concern about Iran’s moves to bolter its military muscle, including advances in its nuclear program the West believes is aimed at developing atomic bombs — accusations Iran denies.

The United States has also flagged concern about Iran’s growing missile capabilities, and has been quietly helping Arab states boost their missile defenses.

The Saudi package, Exum said, had to be viewed in the context of other deals in the region. He cited the expected sale of a missile defense system manufactured by Lockheed Martin Corp to the United Arab Emirates.

Earlier on Monday, Pentagon spokesman Colonel Dave Lapan said he expected Congress would receive official notification of the long-anticipated Saudi deal within the next week or so.

Lapan declined to comment on details, however, saying Congress needed to be notified first.


The senior defense official said the U.S.-Saudi arms deal also included 70 of Boeing’s Apache helicopters and 36 Little Birds.

If approved, the Saudi deal would provide a huge boost to Boeing Co’s defense unit, which had several key programs axed by Defense Secretary Robert Gates last year.

“This transaction shows that there may still be a lot of life in the F-15 fighter and other Boeing legacy aircraft programs,” said defense analyst Loren Thompson of the Virginia-based Lexington Institute.

“The Saudi sale by itself will make a big difference to the company’s revenues for at least the next five years,” Thompson said.

Boeing share were up 36 cents at $64.20 in mid-afternoon trading on the New York Stock Exchange.

Upon congressional notification, lawmakers get 30 days to object to the deal. But notifications are usually not sent unless lawmakers have already broadly agreed to the sale.

Saudi Arabia was the biggest buyer of U.S. weapons during a four-year span of 2005 through 2008, with $11.2 billion in deals, according to the U.S. Congressional Research Service.

Additional reporting by Andrea Shalal-Esa, editing by Jackie Frank and Vicki Allen

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below